The Political Economy of Subsidiarity in Labour Market Reforms: the United Kingdom and Italy in Times of Crisis

ABSTRACT This article seeks to contribute to the literature centred on the principle of subsidiarity by highlighting the way in which political actors apply different dimensions of subsidiarity, horizontal versus vertical, in the field of labour market policy. It compares labour market reforms in Britain and Italy in the wake of international economic crises, shedding light on the role of subsidiarity dimensions. It shows that Britain applied the principle of horizontal subsidiarity in quasi market mechanisms while Italy chiefly resorted to the vertical dimension that helped shifting labour market policies from income replacement to welfare-to-work. Additionally, the article explores how the principle of subsidiarity may affect the relationships between the European Union on one side and Britain and Italy on the other in the field of labour market policies.